CFMEU report says mine wage cutting costing $800 million a year but One Nation says union to blame

With another $540 million lost in Queensland mining districts, the national impact was as high as $825 million a year.

Titled Wage-cutting Strategies in the Mining Industry: the Cost to Communities and Workers, the union-backed report is the latest grenade to be lobbed in an increasingly high-profile battle over the use of casual labour to drive down wage rates.

"An increasing reliance on casual workers and labour-hire has created a situation where many workers in Australia's mining sector are missing out on basic workplace entitlements, such as sick or family leave," the report says.

"Because of these labour-cost reduction strategies, job insecurity has risen in the mining sector, undermining the sector's value to individual workers, as well as the regional economies dependent on mining activity."

Much of the focus on wage-underpayment, nationally, has been on the restaurant, retail and "gig economy" sectors, but the growing use of labour hire across the coal industry - as reported by the Newcastle Herald as far back as 2015 - has led to a slate of accusations that employers have been ripping-off workers.

READ MORE The Herald's Opinion: Report will make waves

Former Mount Thorley/Warkworth casual Ben Reynard, who is the lead claimant in a CFMEU class action begun last year against labour-hire firm WorkPac, yesterday welcomed the new report.

"As a casual you are treated like a second-class citizen: same annual roster, same supervisor, less pay and no sick leave or annual leave," Mr Reynard said.

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Although the class action and other court cases are part of a broader CFMEU arsenal against casual employment, the union's role in negotiating some of the agreements now under fire has been highlighted by One Nation Senator Malcolm Roberts, based on complaints brought to him by Hunter Region mine workers.

But yesterday's launch in McKay, Queensland, was all about the ALP and the CFMEU fighting as a united front against a Coalition government that Mr Albanese said "likes to champion mining [yet] seems happy enough for mineworkers to get ripped off".

Mr Albanese said Industrial Relations Minister Christian Porter was "out of touch" last week when he defended employers by saying casuals were "paid extra in lieu of entitlements".

He said a "blinkered" government had nothing to say about casuals working the same hours and the same rosters as their directly employed colleagues but earning 40 per cent less.

The report was commissioned by the CFMEU mining and energy division from the self-described "progressive" think-tank, the McKell Institute.

Author Stephen Whelan from Sydney University based his Hunter findings on 2018 figures provided by the union for Glencore's Liddell mine, where it says permanents earn $133,000 and casuals $90,000 for the same work on the same roster.

The Queensland calculations were based on BHP's Goonyella mine, using 2018 earnings of $160,500 and $114,000.

Using 2016 Census figures to estimate the mining workforces in each study area, Dr Whelan calculated the wage impacts on a workforce with 30 per cent casuals, and again with 40 per cent casuals.

Annual leave - unpaid for casuals - was also taken into account.

For the Hunter, this showed mining wage reductions of between $113 million and $201 million.

When the "flow-on" effects were included, the implied cost to the region's economy was between $158 million and $282 million a year.

The corresponding Queensland figures were $290 million to $542 million, for a national cost of between $448 million and $825 million - an impact that CFMEU mining president Tony Maher described yesterday as "brutal".

"Anyone with any exposure to the mining industry knows the toxic effect that labour hire has had, Mr Maher said.

The chief executive of the NSW Minerals Council, Stephen Galilee, responded by saying that mining sector wages were "generally regarded as higher than other comparable industries", with mining companies spending billions of dollars each year in the Hunter, generating about 20 per cent of the region's economic activity.

"The latest figures from Coal Services show that in the past two years, the number of contractors in the NSW coal sector has increased by less than the increase in direct employees, who comprise around two thirds of the workforce," Mr Galilee said.

Coal Services is the privatised version of the former government-run Joint Coal Board, and is controlled in equal shares by the Minerals Council and the CFMEU.

Senator Roberts has raised questions in federal parliament about what he sees as inherent conflicts of interest in having an employers' representative and the main industry union in charge of the primary regulator, and he yesterday blamed a "cosy relationship" between the union and at least some employers for the very situation the union was now complaining about.

"Unlawful, immoral and unethical employment practices are entrenched in the mining industry to the full knowledge of the Hunter Valley CFMEU and the ALP," Senator Roberts said late yesterday.

"The nerve of the CFMEU to start complaining about the underpayment of casual coal miners, when they themselves signed-off on unfair and unjust enterprise agreements that underpay casuals."

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